A temporary tax on extraordinary profits for certain companies during 2023
Translated from Swedish by AI; the translation may contain errors. The Swedish text is the original.
Summary AI, written in advance
S wants to introduce a temporary tax on extraordinary profits for fossil companies in 2023 to help ordinary people in the crisis 1 2. S considers it reasonable that fossil companies contribute extra when they are making a killing 1 2 and that the proposal is a necessary measure to mitigate the effects of extreme electricity prices 3. C wants to tax fossil windfalls but wants to exempt renewable alternatives to secure competitiveness and independence 4 5 6. MP welcomes the solidarity contribution but also wants to exempt the renewable 7. SD calls for approval of the committee's proposal 8 and notes that there is no room in the EU regulation to exempt renewable energy sources 8.
Written by AI in advance and may contain errors. The numbers lead to the speech a statement builds on; check against the text below.
Mathias Tegnér (S)
Mr. Speaker! The report we are dealing with today, the Committee on Taxation's report 9, concerns a temporary tax on extraordinary profits for certain companies during 2023.
In practice, this is about the introduction of a temporary tax on profits in an extreme time. Some companies mean, in this context, fossil fuel companies, as the tax will hit companies where 75 percent of the turnover is attributable to activities within the fossil fuel sector.
The background to these rules is an EU regulation, 2022/1854, on a crisis intervention to address the high energy prices.
The regulation actually contains two parts. It is partly what we are debating today, a solidarity contribution, an extra tax, on fossil companies, and partly price caps for electricity producers.
The bill we are dealing with right now concerns only the solidarity contribution. Part two is unfortunately delayed. And it is in itself worrying that the government seems to be dragging its feet even in this matter.
Today's report therefore means proposals that a temporary tax is levied on the part of companies' taxable surplus in 2023 that exceeds 120 percent of the average taxable result for the years 2018-2021.
The temporary tax amounts to 33 percent and is levied in addition to the ordinary corporate tax of 20.6 percent.
The new provisions, which are introduced in a new temporary act, are proposed to enter into force on 1 January 2023 and be applied to the tax year that begins in the new year.
When describing the bill in this way, it can be perceived as technical or bureaucratic. At the same time, I think the extra tax can also be ideological. Europe and the Europeans and Sweden and the Swedish people are now facing increasingly tougher economic times. In that case, it is reasonable that fossil companies that are making a killing actually contribute a little extra.
Because we find ourselves in a restless time, and politics needs to prioritize. Households should feel security when it is restless in our global environment and in our economy. Here, one unfortunately must conclude that the EU Commission has seen what the right-conservative government in Sweden does not seem to see. In Europe, including Sweden, we have extreme electricity prices. The EU Commission did what one could expect, namely to make decisions on a solidarity contribution and a price cap on electricity. This stands in stark contrast to the current government in Sweden.
In the election campaign, it was promised that a price cap, a high-cost protection, would be in place by November 1. Ulf Kristersson lied to the Swedish people straight to their faces. Now it seems the support might possibly come in February, and it is not some high-cost protection. And it is not supposed to apply to Norrland. If companies are to be covered, it is still shrouded in mystery. Here, it is obvious that the EU Commission is on the ball that the Kristersson government has dropped.
I am glad that the solidarity contribution is now in place, even if the price cap seems to be delayed. I am glad that the Tidö parties stand behind the European Commission's actions. But the Kristersson government obviously has much to learn from the European Commission when it comes to seeing how ordinary people are doing. And quite honestly, it is not the European Commission that is failing, but it is Sweden's government that does not see how ordinary people are doing.
But one should be happy with the little, Mr. Speaker. At least the solidarity contribution is coming into place now. The problem is only that it does not mean that hard-pressed Swedes can manage high electricity bills now during Christmas. Therefore, the extra revenues that the extra tax or the solidarity contribution will bring in could finance, for example, a temporary increase of the child allowance, which we Social Democrats have proposed in our budget.
The money could also be used for the electricity and gas price crisis that we Social Democrats proposed back in September.
The purpose of these proposals is that ordinary people should get help to get through the crisis. It is important, it is right and it is necessary that all Swedes feel that the state has their back in a crisis like this.
Mr. Speaker! As has been said, it is pleasing that all parties stand behind the proposal for a temporary tax on extraordinary profits, even though the Center Party and the Green Party have raised technical objections regarding the design of the law.
We Social Democrats have also, at an early stage, raised objections regarding the legal basis of the EU regulation. Despite this, I want to summarize by expressing the Social Democrats' wholehearted support for various measures that help ordinary people in an extreme time with extreme energy prices. It is pleasing that we are in agreement on this measure of a temporary tax on extraordinary profits. But now the government must also deliver other policies such as electricity price support because people are waiting today. People lack money right now.
Here we have Social Democrats who have made sharp proposals such as a temporarily increased child allowance, an electricity and gas price emergency, and much more, because we Social Democrats say it as it is and do what is required. For us Social Democrats, it is important to only say things that are true.
With that, I move for approval of the proposal in the committee report and the government bill.
Rickard Nordin (C)
Mr. Speaker! The Russian invasion of Ukraine, together with Russian hybrid warfare on the European energy market, has had a very significant impact on both Swedish and European electricity prices and energy supply. It has created strongly changed conditions for the functioning of the energy market.
Swedish and European households and companies now face a winter with very large challenges and higher energy prices than normal. Extraordinary measures are needed to manage the energy crisis.
The problem we see with the legislation that has now been presented is that, in the process and the consequences for households and companies, one has not really taken a stand on climate change.
In the government's proposal, which we heard that the Social Democrats also stand behind, a punitive tax is placed not only on the fossil but also on the renewable. This goes directly against the council conclusions that the government itself signed as recently as last week, after the summit of the European Council.
One of the points describes how the European Council reiterates the importance of increasing investments in projects such as renewable energy to phase out the Union's dependence on imports of Russian fossil fuels, accelerate the green transition, and secure security of supply. But there will be no increased investments in renewables with increased taxation of the same.
It is fundamentally incorrect that a tax intended to target fossil fuels does not exempt the renewable alternatives, and it is of essential importance that the government, in its work within the EU, ensures that renewable products are promoted. It is crucial if Sweden and the EU are to be able to not only reach the climate goals but also rid themselves of the dependence on fossil fuels from countries like Russia or, for that matter, Qatar, Saudi Arabia and others.
The focus on renewables is therefore also a question of our security of supply and security. For every liter of biofuel we produce in Sweden, a liter of Russian oil can be pushed away from Europe.
The Russian aggression and Putin's war are a direct and concrete reason for the energy crisis that Europe is currently in. But for the government to say that record-high temperatures in Europe due to climate change is an argument for temporary measures is directly incorrect. The temperatures we see today, we will see again, time and again and again, given the climate change. To refer to that as a basis for temporary measures is therefore directly incorrect. Rather, it shows the need for stable conditions, extra good conditions for renewables, and not taxing away the conditions one has to increase investments.
We in the Center Party will work in the long term to find appropriate solutions. Taxing the fossil is completely correct, but we want to leave the renewable alone. Therefore, I move for approval of our reservation in the report.
Mathias Tegnér (S)
Mr. Speaker! In this matter, I believe that in some respects one needs to consider what is the main point and what is the secondary point.
The proposal is primarily about fossil fuel companies contributing a bit more when they make excess profits due to the energy crisis. In that sense, I think, as I also said in my speech, that this tax becomes ideological because we are all in a tough time and several of these companies are actually making a killing.
The proposal means that companies that have 75 percent of their turnover attributable to the extraction of crude oil, natural gas or coal, petroleum refining or the manufacture of coal products are the companies that are affected by the extra tax.
Our assessment has been that the proposal will hit reasonably well. That the fossil fuel companies should contribute a bit more feels reasonable for us Social Democrats.
Furthermore, the question becomes partially binary, at least if we are talking about 2023. One can either let the legislation enter into force on 1 January or not do so. Then one must choose. Therefore, I would like to ask the member and the Center Party if they want or do not want the fossil fuel companies to pay an extra tax on their excess profits during 2023.
Rickard Nordin (C)
Mr. Speaker! For me, it is obvious. I have no problem with taxing the companies involved in fossil activities more heavily. That is also what is stated both in our reservation and in the report.
But the chairman has a point that this is ideological, because the Center Party does not want to raise the tax on that which is renewable. The Social Democrats want to raise the tax on everything. There we obviously have an ideological difference. We want to exempt the renewable parts and ensure that the increased production there does not face increased taxation. We think it is good that one can make a profit on renewable fuels because it secures our competitiveness and our independence from stupid and unnecessary oil states and makes us safer here in Sweden.
It is therefore an ideological difference because we want to exempt what is good while the Social Democrats want to tax everything. That is where the Center Party and the Social Democrats differ.
Mathias Tegnér (S)
Mr. Speaker! Thank you, Member, for the answer!
I just want to be clear for the sake of the matter that the Social Democrats have never wanted and will never want to tax everything. On the contrary, it has been a Social Democratic art to govern in such a way that one succeeds in financing a well-functioning welfare state and functioning redistribution systems and to do it in an efficient and good way so that taxes do not create greater problems than they need to.
The Social Democrats and the Social Democrat-led government have, also together with the Centre Party, pursued an active industrial policy that has shown that it is possible to reward well-functioning companies within the renewable sector.
But it is not the same thing as voting no to the proposal that the fossil fuel companies should pay an extra tax on the profits they will make in 2023, or for that matter wanting to tax everything, as the member just said.
I feel that it is still reasonable to return to the main question: Is it reasonable or is it not reasonable that fossil companies during 2023 should pay an extra tax on profits made due to the extreme electricity prices, which, for example, could be used to mitigate the effects for ordinary people?
Rickard Nordin (C)
Mr. Speaker! From the Center Party's side, we have been clear. We are prepared to introduce a tax on the fossil [fuels] and the profits that have occurred there. We think that is good. The difference between the Center Party and the Social Democrats is that the Social Democrats, in this case, do not make a distinction between renewable and fossil.
The government says that they do not want and have never wanted to tax everything. Yet, that is exactly what is being done with this proposal. No difference is made regarding that which can help us out of the crisis, namely more production of renewable fuels, which creates jobs in Sweden, increases our security policy focus, and could also make a difference for the price at the pump. That is what the Social Democrats want to continue to tax.
We have had a good cooperation with the Social Democrats in recent years. It is a pity that one does not choose to continue that cooperation here in the Riksdag by focusing on what is the future and taxing away what belongs to the past. I can only regret that the Social Democrats do not continue on the path taken but go back to old sins by choosing to tax both the renewable and the fossil. It is sad.
Marielle Lahti (MP)
Mr. Speaker! As the speakers before me have mentioned, it is no secret that there is an energy crisis in Europe, which hits both households and companies very hard. We in Miljöpartiet welcome this initiative – a solidarity contribution in the form of a point tax that will be introduced. But we also want to point out that this laudable initiative must not undermine the renewable. This is our objection in the previous reservation, which we now maintain and I move for approval of.
I want to pause for a moment on the purpose of the tax and what the revenues are to be used for. We in Miljöpartiet want those who have been affected by the energy crisis to receive support. Of course, all households and companies in the whole of Sweden should receive support, not just those in southern Sweden. Why northern Sweden has been exempted in the government's proposal for electricity support is completely incomprehensible and not justifiable, we believe.
We also want more accurate support. It is distasteful that billionaires receive billions to heat pools, garages, and other things, while the entire northern part of Sweden is completely excluded. Therefore, we want the Energy Markets Inspectorate to quickly investigate how many vulnerable customers there are in Sweden so that we can obtain more accurate support. We suspect, however, that the energy crisis unfortunately may continue for a while longer, so there may be reason to investigate the possibilities for accurate support for those who truly need it.
We also want to ensure that no customers are disconnected this winter. Customers who are facing challenges in paying the high energy bills that we have received due to Putin's energy war should not be affected by being denied access to electricity and energy.
Per Söderlund (SD)
Mr. Speaker! I shall be brief; most of this has already been said in the report. I would like to begin by moving for approval of the committee's proposal for a decision.
In this report, the committee considers the Government's Proposition 2022/23:20 A temporary tax on extraordinary profits for certain companies during 2023. In the proposition, proposals are submitted for the introduction of a temporary tax on extraordinary profits for certain companies, which corresponds to the rules on a solidarity contribution according to EU regulation. The proposal applies to companies whose net turnover during the tax year 2023 is attributable to at least 75 percent to activities within the sector for fossil fuels. The temporary tax is levied on the part of the companies' taxable surplus for 2023 that exceeds 120 percent of the average taxable result for the years 2018-2021. The temporary tax amounts to 33 percent and is levied in addition to the ordinary corporate tax.
Mr. Speaker! The Committee notes that the activities primarily covered by the proposed tax are companies operating within the fossil sector. The Committee further notes, regarding the tax base, that no distinction is made between renewable and fossil energy sources in the EU regulation. Exempting renewable energy sources from taxation is therefore not compatible with the EU regulation.
A temporary tax on extraordinary profits for certain companies during 2023
Mr. Speaker! The Center Party's follow-up motion is heart-wrenching. To exempt renewable fuels would not be directly wrong from a climate perspective. One may think what one wants about this proposition, but it does not change the fact that we are locked by the EU regulation that lies behind the proposals. There, no room is left to exempt renewable energy sources, and therefore the motion must be rejected.
In this speech, Eric Westroth (SD) agreed.
The deliberation was hereby concluded.
(Decisions were made under § 17.)
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.